264 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2022 Additional Information We Are Kenanga Message From Our Leaders Our Sustainability Approach How We Are Governed Financial Statements Shareholders’ Information 47. CAPITAL MANAGEMENT AND CAPITAL ADEQUACY (CONT’D.) Capital adequacy (cont’d.) (i) Components of Tier 1 and Tier 2 capital (cont’d.): Breakdown of risk weighted assets in the various categories of risks are as follows: 2022 2021 Notional RM’000 Risk- weighted RM’000 Notional RM’000 Risk- weighted RM’000 Group Credit risk 5,031,093 1,437,747 5,567,911 1,358,911 Market risk - 142,514 - 456,072 Operational risk - 894,847 - 828,589 Large exposure risk - 13,108 - 11,794 Total Risk Weighted Assets 5,031,093 2,488,216 5,567,911 2,655,366 Bank Credit risk 4,450,896 1,403,888 5,061,023 1,305,693 Market risk - 141,026 - 440,663 Operational risk - 628,776 - 617,538 Large exposure risk - 13,108 - 11,794 Total Risk Weighted Assets 4,450,896 2,186,798 5,061,023 2,375,688 (ii) Transitional arrangements for regulatory capital treatment of accounting provisions The Bank has elected to apply the transitional arrangements for regulatory capital treatment of accounting provisions for four financial years beginning on 1 January 2020 and apply the transitional arrangements with 31 December 2020 as the first reporting period. Under the transitional arrangements, the Bank is allowed to add back the amount of loss allowance measured at an amount equal to 12-month and lifetime expected credit losses to the extent they are ascribed to non-credit-impaired exposures (“Stage 1 and Stage 2 provisions”) to CET 1 Capital.
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